Major automakers reported lower U.S. sales for December led by a 9 percent slide at Ford Motor Co as the industry closed out its weakest year in over a decade and faced the prospect of deeper declines in 2008.
Ford's slide and gains by Toyota Motor Corp in 2007 made the Japanese automaker the No. 2 player in the U.S. market, ending Ford's 76-year claim to that title.
The auto sales results, one of the first snapshots each month of U.S. consumer spending, came as oil prices exceeded $100 per barrel.
Higher gasoline prices combined with a weak housing market have raised concerns that the U.S. economy could tip into recession in 2008 and cause consumers to delay big-ticket purchases such as new vehicles.
Shares in GM and Ford slipped to their lowest levels since mid-2006 in advance of the sales results, which were largely as analysts' had expected.
General Motors Corp, on track to be surpassed by Toyota for global sales leadership in 2007, saw its U.S. sales drop 5 percent in December. Excluding heavier trucks, GM's sales were down 4 percent.
Toyota's sales for December were down 1.7 percent, while smaller rival Nissan Motor Co posted a sales decline of 2.4 percent.
Privately held Chrysler LLC and Honda Motor Co were the only major automakers to avoid sales declines. Honda's results were almost flat, buoyed by sales gains for its Accord and Civic sedans.
Chrysler posted a sales rise of just under 1 percent, driven by a strong performance by its revamped minivans, a family-friendly segment other automakers have abandoned.
On a full-year basis, GM and Chrysler sales were both down 6 percent while Ford sales dropped 12 percent reflecting a sharp pullback in sales to rental car agencies and a decision to scrap models such as the older version of its Taurus sedan.
Ford's retail market share also fell below the 13 percent mark in December for the second consecutive month. The company has targeted maintaining a 13 percent retail market share as the basis for its turnaround.
Japanese automakers were all up on a full-year basis. Toyota sales rose 2.7 percent, while Honda's sales gained 2.5 percent. Nissan bounced back from a slow year in 2006 with a 4.5 percent gain.
Reflecting tougher expectations for the current year, Toyota trimmed its 2008 U.S. sales outlook. Although Toyota had earlier expected full-year sales growth of about 3 percent, executives said on Thursday that gains were now expected to be 1 percent to 2 percent.
The No. 1 Japanese automaker also said it expected flat hybrid sales in 2008 after a year of explosive growth that saw sales of its market-leading Prius rise 69 percent.
TACKLING A TOUGH YEAR
Full-year 2007 sales dropped almost 3 percent to 16.14 million vehicles, the lowest since 1998 and down from 16.55 million a year earlier. Industry-wide sales for December were off almost 3 percent at 1.39 million vehicles.
In response, Ford said it was readying a new marketing plan intended to bring shoppers back to the brand.
Chrysler said it would roll out a program in February that would add features to 10 or so existing models to make them more attractive.
For 2008, I don't see a lot of bright spots, said Jesse Toprak, analyst at industry tracking service Edmunds.com. Incentives will definitely go up. The market is shrinking.
GM Chief Executive Rick Wagoner said he expected the market in 2008 would be about as tough as the year just ended.
There are some obvious reasons for concern, but on balance I suspect '08 will be similar to '07 in total, although likely weaker in the first half and stronger in the second, Wagoner told reporters in an online chat.
Other GM sales executives said the automaker expected that the current quarter would be the weakest of the year with the U.S. economy managing to avoid recession.
Ford executives also said there was reason for caution about the coming months, noting that the full weight of factors such as the housing slump had not been felt.
We see ... economic headwinds heading our way, said Jim Farley, Ford's global vice president for marketing.
Chrysler's chief marketing and sales officer, Jim Press, who like Farley was hired away from Toyota last year, said he expected Chrysler could post a slight gain in showroom sales in a declining market in 2008.
The automaker, now controlled by Cerberus Capital Management, will also throttle back on less-profitable sales to commercial fleet operators to get that share of its sales below 30 percent, he said.
Most major automakers report sales, including full-year results, after adjusting for the number of sales days. December had 26 sales days, unchanged from a year earlier.
Shares of Ford closed down 15 cents at $6.45; GM's shares closed down 49 cents to $23.92. Both trade on the New York Stock Exchange.